Russia expressed concern on Wednesday about the introduction of a carbon tax at the borders of the European Union. This measure would be costly for Moscow, which is very dependent on its hydrocarbon exports, especially to Europe.
"The willingness of our European partners to introduce a carbon tax under the guise of a climate agenda has raised concerns in a number of countries," said Dmitry Medvedev, ex-Prime Minister and Vice-President of the Security Council.
"Very serious consequences"
"This will also have very serious consequences for the Russian economy, our basic industries, such as ferrous and non-ferrous metallurgy, the chemical industry, energy could suffer," he said, referring in particular to the Russian oil and coal exports. Citing estimates from the Russian Academy of Sciences, he said that “the financial losses of domestic exporters will amount to billions of euros”.
To overcome the coronavirus crisis, the EU announced this summer a recovery plan of 750 billion euros, the funds of which are drawn from an unprecedented debt common to EU member countries. To repay this debt, the EU plans, among other things, to create a carbon tax on imported products before 2023.
Necessary negotiations
Calling the measure "latent protectionism (...) which will hamper the access of (Russian) goods to the EU market", Dmitry Medvedev stressed the need to negotiate both in a bilateral format, with the EU, and with relevant international organizations, such as the WTO. A large producer of raw materials and in particular of hydrocarbons, Russia derives a significant portion of its budgetary revenues from their exports.
Russia has already suffered a setback with the shutdown of the Nord Stream 2 gas pipeline project, which was to supply Europe and especially Germany with Russian gas. Although almost complete, the project is on hold due to threats of US sanctions. Vladimir Poutine has set himself the objective of increasing by 2030 "by at least 70%" exports of products other than hydrocarbons.
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